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Black and White Technical Report 29/08/2022

Black and White Technical Report 29/08/2022, FP Markets

Central bank interest rate movements continue to impact sentiment towards equities, following the statements of the US Fed last Friday we will see Quantitative tightening increase and liquidity decline with equities to quickly follow in this seasonally weak period of the year. 

Global political uncertainties may have finally and seriously impacted the recent price rally. 

Gold and Silver have again lost bullish momentum and remain at risk of retesting July lows and lower.  

Rejection of higher prices following the channel breakout has been decisive with strong ranges high to low.

XJO WEEKLY    
Price structure:  Extended move. 

The Weekly chart of the XJO displays a “hangman” bar for last week, in the weekly timeframe this is a very bearish signal and price weakness to develop. The Primary trend has remained down for the past 5 months with last week potentially marking the new lower high point. Initial downside target is 6930 with 6640 and the tentative trendline both inline to be tested.

 

Indicator: Relative Strength 14

Relative Strength has closed above the 50 level. Overall price momentum still remains on the positive side of 50. However, should Relative Strength move below the key 50 level a signal of weak price momentum would prevail.

Black and White Technical Report 29/08/2022, FP Markets
Comments from last week: Support of 6930 has been cleared with an extended range week, low to high. The Index has moved higher 5 weeks in a row and is now considered an extended run. Expect some retracement to retest the 6930 level. This remains a corrective price movement within a down trend.

 

XJO DAILY  
Price structure:

Last staged a retest of the 7130 closing price high set the 17th August. The declining volumes on this current rally only suggests turnover of equities with no new money entering the market. This current small double top has the potential to retest the 6930 level in the coming days. The next following daily support is 6765 essentially being the lower extension of the double top should the low (6950) set a lower close on a daily basis.

 

Indicator:  Relative Strength 14

The Relative Strength Indicator (14) reflecting the underlying price momentum has moved higher above the 50 level indicating strong positive momentum. The Daily Relative Strength is potentially setting up a divergence sell signal and may signal a retest of the 6930 level on this slowing momentum.

 

Indicator:  VOLUME

Again, last Friday’s lower volume bar is not an encouraging signal to indicate continuing new buyers are entering the market.

Only stronger volumes over 1Bil on a Daily basis would indicate strong new money buying. 

Black and White Technical Report 29/08/2022, FP Markets
Comments from last week:  Last Friday’s new high set up a Fake Out (FO) reversal signal. Consolidation and price reversal at this 7100 point level may lead to a retest of 6930 in the coming weeks. The current retracement is over 50% of the initial decline and brings the Index into the much larger consolidation area setup over the past 8 months.

 

S&P 500 WEEKLY
Price structure: 

As expected from last week, the FO bar of 2 weeks ago has played out reversing the immediate price direction. The Weekly chart has confirmed higher price rejection with a pivot point in place below the short trendline with price also closing below the important 4200 level. The SPX has remained within a Primary downtrend from March 2022, the current price rejection has the potential to move the index lower to retest 3715 lows.

 

Indicator:  Relative Strength Indicator 14

The reading over the 50 level will offer a solid buy signal on momentum, last week the indicator turned lower, indicating a change in momentum. A movement below the 50 level would be a short term bearish signal until a reading above this key level.

Black and White Technical Report 29/08/2022, FP Markets

Comments from last week: With the index momentarily moving over the key 4300 level, last week’s bar is shown as a FO+1, this early reversal bar has moved to back test the 4200. Price failure from this level would signal a top in place and a potential move back to support at 4050 points.

 

S&P 500 DAILY
Price structure:  Developing bullish structure.

Last Friday set up a pivot reversal with a large range and “impulsive” movement lower. These types of moves can headline a continuation move for the coming days. Rejection of the 200 day moving average is now complete with the current lower high in place also reconfirming the larger weekly trend. First significant weekly support is shown at 3940. Price moving over the 4200 level would signal a bullish reversal. 

 

Indicator: Relative Strength 14

RSI has rolled lower below the 70 level to the 50 level, the short rebound has now turned sideways, further declines in price will move the reading below the 50 level confirming weak price momentum.

Black and White Technical Report 29/08/2022, FP Markets
Comments from last week:  The S&P daily chart shows the index value trading up to the 200 day moving average with immediate reaction lower. Current daily support is shown at 4177. Bullish reversal would be indicated with a closing price over the FO high; this will be confirmed with a close over the 200 day moving average.


NASDAQ DAILY

Price structure:  Primary DOWN Trend remains

The Daily Nasdaq displays the same “lower high” price rejection with an OPd (outside period) ; the current test of 12573 will offer further insight to price movement with a break below this level. Friday’s range is very large compared to recent price movements; this type of movement often precedes further declines.

 

Indicator: Relative Strength 14

The indicator moving away from the 70 level is a signal of a loss of positive momentum. With a continuing move, the indicator has crossed lower below the 50 level, price movement will remain negative with a continued reading below 50 and have the potential to retest the tentative trendline.

Black and White Technical Report 29/08/2022, FP Markets
Comments from last week:
  Price rejection at the 13556 level highlighted with the OPu, the current rejection movement has crossed the short trendline with last Friday closing towards the low of the range. The Nasdaq remains in a “corrective” move higher; this current retracement may result in a limited pullback before another advance over the 13,556 level. The daily range remains small indicating limited interest in this decline, so far.

 

USD  Spot GOLD – DAILY
Is it a Bull market?  Answer = No

Rejection from the developed Bear flag (3+ bars) has moved price back into the long-term downward price channel. A further breakdown below $1720 would further confirm the current move underway. The daily range is larger than previous ranges indicating a further directional move may be underway. The first significant support level is $1720 with $1676 below.

Indicator:  Relative Strength 14

Price momentum is working lower with the RSI turning lower below the 50 level. Price momentum has again turned negative. (Price consolidation would naturally see the RSI drift back too around the 50 level. A strong movement either way will show the next directional move.)

Black and White Technical Report 29/08/2022, FP Markets
Comments from last week:  Gold had the best chance to make a substantial advance from the breakout of the downward channel 2 weeks ago. Instead, price set an engulfing range and has moved lower back from the $1800 level into the channel. The low close of last Friday indicates a momentum movement underway that may continue lower. Gold remains within a Primary downtrend.

 

SILVER DAILY   
Price structure:   Bull market? – No

The Daily chart of Silver also displays a bear flag breakdown from last Friday’s trading session. The $18.40 support level remains as the current downside target in this primary downtrend.

 

Indicator:  Relative Strength 14

Current Relative Strength is rolling lower with the movement below the 50-level, RSI turning lower would reflect the underlying momentum turning negative. A continuing move below the 50 level and lower would be very bearish in the short term.

Black and White Technical Report 29/08/2022, FP Markets
Comments from last week: Last week Silver traded lower from a failed bullish flag pattern with several large high to low ranges moving lower with Friday’s range the longest closing towards the low of the range indicating the potential to retest the $18.40 level. Current price movements have set a lower high and further confirm that Silver remains within a Primary downtrend. The potential for a further move higher remains only should price close above the $20.44 level.


AUD GOLD DAILY    

Price structure:  Consolidation

AUD Gold continues to consolidate along the $2537.0 level; the lower shadows of recent bars offer an insight to current support. Lower support level is $2440 with the down trendline as upper resistance. 

 

Indicator Relative Strength 14

Relative Strength has turned sideways  and lower from above the 50 level, this shows an decrease in positive price momentum and remains a strong warning for further declines.

Black and White Technical Report 29/08/2022, FP Markets
Comments from last week: Nothing to report! Consolidation continues. Daily ranges remain short with close open to close candle bodies. The current pattern suggests a breakdown lower to retest the 2440 level.

 

COPPER DAILY   
Price structure:  “V” recovery

Copper set a small FO (Fake out) of last Wednesday’s high, this second rejection of the $3.80 level. This small pattern has the potential to set lower prices in the days ahead.

 

Indicator: Relative Strength 14

Current reading has swung from below the 30-level to read higher as downward momentum has slowed. Should price consolidate at this level, the RSI will naturally drift towards the 50 level. The key now is for the RSI to swing back above the 50 level as a reflection of ongoing price gains. A sharp cross of the 50 level is required to offer a strong buy signal.

Black and White Technical Report 29/08/2022, FP Markets

Comments from last week:  The failure of price to move over the $3.80 indicates weak momentum and further consolidation following last Monday’s “gap down open”. Copper remains with a Primary down trend. Price moving lower to a new low from this level would indicate a very strong downtrend underway.

 

AUSTRALIAN VOLATILITY INDEX:

Volatility reading has moved above the 13 level, indicating forward pricing of PUT options is increasing. In general, lower prices or consolidation of equity is indicated as the reading remains above the 13 level.

For continued support of equities, the XVI should move below the “13” level.

The cost of 3month forward PUT options is decreasing from recent elevated levels.

The XVI is the difference between 3-month forward pricing of ETO Options against the current month.

As markets anticipate events, the forward priced option volatility changes, hence as forward price changes, this “skew” in pricing is measured in this XVI.

The XVI value works as an inverse observation of the underlying market.  

Black and White Technical Report 29/08/2022, FP Markets

USD DOLLAR INDEX  
Price structure:

Following last week’s early rally to test the 110 level the current decline is developing into a bullish flag pattern. The current OP (Outside Period) can mark the swing point higher. The underlying primary trend is up, this flag pattern is a continuation signal within this trend. Price targets from this level may be 116.0.

 

Indicator:  Relative Strength 14

Relative Strength has turned sharply lower in line with price movements and should now be monitored for further consolidation as the current reading is above the 50 level but below the 70 level. This will move lower to sideways should price decline further, only a continued reading above the 50 level would indicate continuing strong price momentum.

Black and White Technical Report 29/08/2022, FP Markets

Comments from last week:  The US Dollar Index has staged strong primary movements low to high pushing higher from the pivot point, with an immediate break higher above 107.40 resistance. This is a very bullish move with the potential to retest the “shooting star” high at 110.0.

WTI – CRUDE OIL
Price structure:  Full Bull Market remains.
This commodity is highly news driven around supply -demand.

Consolidation above the $84.25level and below the $94.0 level the larger range week closing above the open is a sign the buyers remain as price also closes outside of the short down trendline. Further, a close above the $94.0 would regain this level of support; current momentum does not suggest this will occur.

  

Indicator: Relative Strength 14

The RSI turning towards the 50 is a result of price consolidation, a move over this key level would signal increasing positive price momentum.

Black and White Technical Report 29/08/2022, FP Markets
Comments from last week: WTI remains within a secondary movement lower, the “overlapping” weekly price ranges suggest a measured move underway rather than a “committed sell” from traders. Last week’s retest of the $84.25 level reinforces this level as support. A breakdown below this level would indicate a major sentiment change. Further, a close above the $94.0 would regain this level of support, current momentum does not suggest this will occur.

  • Black and White Technical Report 29/08/2022, FP Markets
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